Loan-burdened Bura farmers weigh their options

For hundreds of indigenous farmers at the Bura Irrigation Scheme in Tana River County, farming is an activity they yearn to be part of but cannot.

They are caught in the tight grip of credit reference bureaus, crippling their ability to borrow money and improve productivity on their farms.

Now, all they can do is wallow in nostalgia about the good old days when harvests from cotton, maize, watermelons and rice fetched good money that sustained their livelihoods.

“All my children were in private schools. I used to make money from maize farming until Kenya Seed did the unthinkable to us. That was the genesis of our poverty,” recounts Victor Imbalia.

Mr Imbalia was one of those who took a loan from the Agricultural Finance Corporation (AFC) to invest in large-scale maize production.

Kenya Seed presented a good deal, giving them seeds with the promise that they would get better yields.

Hundreds of farmers took the loans and placed their trust in the provider of the seeds that they had known for decades and who had never failed them.

“We were so excited we got into farming with very high expectations and were sure that in three months, we would be on another level financially,” he says.

However, the contrary happened. The seeds did not yield as expected, and farmers incurred losses.

From a one-acre farm where they expected 50 bags of 90kg, the lucky ones only harvested five bags.

“It was then that we were informed that the seed was not tested in the laboratories in Nairobi before it was brought to us, but instead we were used to test the seed,” he says.

The farmers approached Kenya Seed with their meagre harvests for certification, only to be informed that the product did not qualify for seeds.

They protested against the company and were presented with fresh seeds of a different variety.

By then, most farmers had exhausted their loans and could not get back to the farm.

A few gave it a second shot, and the yields were equally disappointing, leaving farmers with huge debts.

John Karanja, a farmer at the scheme for 37 years, noted that the failure threw more than 300 farmers out of farming.

“All of them became incapacitated, especially when AFC started sending letters and making calls. Some even abandoned the farms and ran away,” he recounts.

Some of the farmers, he said, suffered depression and drowned their sorrows in toxic traditional liquor.

Many others have been left to labour on the farms of guest farmers with the capacity to grow crops.

“Indigenous farmers now rent their farms to the guest farmers for Sh5,000, and work on the same farms as labourers for Sh300 a day,” he says.

Another farmer, Annah Mawio, says: “We have been receiving letters and calls to the office to explain how we will pay the loans and the timelines, but I don't think I will be able to pay, unless I get more cash to invest in my farm, and then use profits to pay the loan."

Some of the farmers owe AFC up to Sh100,000 while others have debts as low as Sh30,000 that continues to accrue interest.

This has bruised their credit scores, hampering efforts to get loans from other banks.

Despite the presidential order to not list with CRBs citizens with debts lower than Sh5 million, the farmers say the order has not helped as they are unable to borrow from other banks.

AFC board chairman Franklin Bett noted that a fraction of the farmers had their debts waived following a presidential order.

“The order was meant for the poorest of farmers that we found incapable of paying their loans. For those whom we found were capable, their loan status remains the same to this day,” he said.

He reiterated that the financier will not waive any debts and has advised the government against it, as it puts them in conflict with partners and donor organisations that provide the funds.

He also noted that habitually waiving loans encourages farmers to invest carelessly in unproductive projects only to blackmail the government when the election period comes around.

Ishmael Kodobo, the chairman of the county assembly’s trade committee, noted that efforts to get the county government to pay the loans for the farmers have been futile.

He said the budget committee had struck out the proposal twice citing the lack of a law on such funds.

“We passed the proposal as the county assembly but were shocked to find out that the Finance executive struck it out saying it would cause him a lot of audit queries,” he said.

The farmers are yet to figure out how to pay the Sh63 million in loans and get back to farming.

Tana River Finance executive Matthew Babwoya urged the farmers to take advantage of the Sh100 million Inuka Fund that will start operating soon to bounce back to farming and enable them to pay their loans.

The Kenya Seed Management in Tana River County did not respond to queries by Nation by the time of filing this story.
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